City of Cape Town to challenge Cogta if Court rules against fixed tariffs

The legal proceedings regarding the City of Cape Town's fixed tariffs and their decision to link certain charges to property values intensified on Wednesday. SAPOA and AfriForum challenged the City's assertion of having "unconstrained power," while the City put forward its counter-application.

In a counter-application, the City argues that if the court rules in favour of AfriForum and SAPOA, it seeks to have Section 75A of the Systems Act declared unconstitutional and invalid, claiming it limits their ability to exercise full municipal powers and deliver essential services to residents.

The Department of Cooperative Governance and Traditional Affairs (Cogta) is the respondent in this case.

At the centre of the dispute, being heard by Judge President Nolwazi Mabindla-Boqwana, as well as presiding judges Judge Andre Le Grange and Judge Katharine Savage, SAPOA and AfriForum are challenging the City’s fixed tariffs and their decision to link certain fixed charges to property values.

In its main application, SAPOA is asking for the three tariffs in the budget, namely the Cleaning Tariff, the Fixed Water Charge, and the Fixed Sanitation Charge, to be declared unconstitutional and invalid.

The CoCT has maintained that its fixed charges are not rates but service charges.

In response to the City's claim from Tuesday that it has unconstrained powers, and that there are no restriction on what it can impose, AfriForum argued residents are in a great deal of trouble if the City’s argument of unfettered power is true. They also explained that the City’s argument doesn’t hold water as “one simply cannot divorce the powers of municipal powers from national legislation”.

AfriForum had previously said they understand the City must raise revenue and deliver essential services, but that the “City must always act within its fiscal powers”.

They also tackled the City’s issue of the “best case scenario” of a R1.9bn shortfall.

“We are saying there should only be one rate, but that they should have the ability to fund everything else through the increase of that rate… We are saying there should not be multiple rates on the same account,” AfriForum’s Advocate Etienne Botha SC said.

On the issue of challenging the fixed water tariff, Botha added that the City has the ability to do an audit, go on a property and determine what its water use is.

A large portion yesterday's proceedings also dealt with the City’s counter-application where if the Court favours the applicants’ interpretation that the Systems Act does not lawfully permit these charges, “it seeks a declaratory order that section 75A (read with s74(2)) of the Systems Act is ‘inconsistent with the Constitution’, and ‘unconstitutional and invalid to the extent of its inconsistency’ (together with related relief)”.

The court heard from the City’s legal representative, Advocate Karrisha Pillay SC, that if the fixed tariffs are scrapped, it would be extremely difficult for the City to recover the shortfall through other revenue sources, such as rates or surcharges.

If the court rules in favour of AfriForum and SAPOA, they are requesting to have until the end of the 2025/26 financial year in June 2026 to remedy the situation, and also that the court refrain from ordering refunds of revenue already collected.

The matter continues.

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